Zimmer Reports Fourth Quarter And 2009 Financial Results
- Net Sales of $1.11 billion for the fourth quarter increased by 7.5% reported over the prior year period (an increase of 2.5% constant currency)
- Diluted EPS for the fourth quarter were $0.74 reported, a decrease of 1.3% from the prior year period, and $1.12 adjusted, an increase of 12.0% over the prior year period
- Net Sales of $4.10 billion for the full year represent a decrease of 0.6% reported from the prior year (an increase of 0.9% constant currency)
- Diluted EPS for the full year were $3.32 reported, a decrease of 10.8% from the prior year, and $3.94 adjusted, a decrease of 2.7% from the prior year
(WARSAW, IN) January 28, 2010—Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the fourth quarter and year ended December 31, 2009. The Company reported fourth quarter net sales of $1.11 billion, an increase of 7.5% reported and 2.5% constant currency over the fourth quarter of 2008. Diluted earnings per share for the quarter were $0.74 reported and $1.12 adjusted, an increase of 12.0% adjusted over the prior year period. Full-year net sales were $4.10 billion, a decrease of 0.6% reported and an increase of 0.9% constant currency. Diluted earnings per share for the year were $3.32 reported and $3.94 adjusted, a decrease of 2.7% adjusted from the prior year.
"A solid performance in the fourth quarter enabled us to accomplish our major objectives for the year," said David Dvorak, Zimmer President and CEO. "We once again recorded year-over-year sales growth for the quarter in all three of our geographic reporting segments, driven by a 5.5% constant currency increase in our industry-leading knee replacement business. The continued improvement in our Reconstructive sales performance, combined with recent new product clearances, forms a foundation for sustained sales growth and leveraged earnings in 2010."
Net earnings for the fourth quarter were $155.2 million on a reported basis and $236.1 million on an adjusted basis, an increase of 5.1% adjusted over the prior year period. Operating cash flow for the fourth quarter was $385.5 million. Net earnings for the full year 2009 were $717.4 million on a reported basis and $849.9 million on an adjusted basis, a decrease of 8.1% adjusted from the prior year. Operating cash flow for the full year was $1,117.5 million.
In the fourth quarter, the Company utilized the proceeds from a $1.0 billion offering of senior unsecured notes to pay off its U.S. dollar senior credit facility debt of $471.0 million and acquired 9.0 million shares of its common stock for an aggregate purchase price of $519.1 million. For the full year 2009, the Company purchased 19.8 million shares for a total of $923.2 million. At the end of the year, $211.1 million of authorization remained under the Company’s $1.25 billion repurchase program, which expires on December 31, 2010.
During the quarter, the Company recorded a goodwill impairment charge of $73.0 million net of tax or $0.35 per diluted share related to its U.S. Spine reporting unit. A combination of factors has contributed to a decrease in the implied fair value of the U.S. Spine reporting unit compared with prior year.
James T. Crines